Mesoblast Limited (MSB) Earnings Call Transcript & Summary

I'm the Non-Executive Chairman of Mesoblast Limited. I'm joining you today from Arizona in the United States, and it's just passed the appointed time. And as we have a quorum present, it is my pleasure to now declare the 2021 Annual General Meeting of Mesoblast Limited formally open. And to welcome you on behalf of my fellow Directors, we're very pleased you have joined us today and welcome the opportunity to update you in person regarding the achievements of our company in the last year. With the ongoing COVID-19 pandemic and associated restrictions, we're holding this meeting virtually. While this virtual format may be familiar for some shareholders, I acknowledge that it may be less so for others. However, I assure you that you will have a similar opportunity to participate today, as you will, at a physical meeting. This includes being able to ask questions through the online platform and through a dedicated phone line and both using an electronic voting card. I'll discuss these processes a little later. I also encourage you to download the online portal guide from Mesoblast's website, if you've not already done so. If in the unfortunate situation, we experience technical issues that impact the meeting, I'll make an assessment of the circumstances and then communicate further with you. If the technical issues are isolated to my location, then I've nominated Donal O'Dwyer to assume the chair and continue the meeting. In the event we take steps to adjourn the meeting, we will make an announcement to the Australian exchange with all relevant details. To minimize the risk of any technical failure, the meeting will be conducted in an audio format through Dr. Itescu, will be on video for his presentation. First, I'd like to introduce my fellow Directors. Dr. Silviu Itescu, Chief Executive, who is joining us from Melbourne; Mr. Donal O'Dwyer, Non-Executive Director and Chair of the Nomination and Remuneration Committee, who's joining us from Sydney; Mr. Michael Spooner, Non-Executive Director and Chair of the Audit and Risk Committee, who is joining us from Brisbane; and Mr. Philip Facchina, Non-Executive Director, who is joining us from Virginia in the United States. In addition, we have 3 other nonexecutive directors who, unfortunately, due to time differences were unable to join us today. Mr. Bill Burns; Ms. Shawn Tomasello; and Dr. Eric Rose. I'm also pleased to say we have a number of key executives joining us to answer questions. Ms. Dagmar Rosa-Bjorkeson, Chief Operating Officer; Dr. Fred Grossman, Chief Medical Officer; Ms. Geraldine Storton, Head of Regulatory Affairs and Quality Management; and Mr. Andrew Chaponnel, Interim Chief Financial Officer. Also available today is a representative from the company's auditors, PWC, Mr. Sam Lobley; our General Counsel, Mr. Peter Howard; as well as Mr. John Steven from our Solicitors, Minter Ellison. Finally, also joining us is Ms. Niva Sivakumar, our Company Secretary. She will be reading out the questions that are submitted online by shareholders today. I'd like to now outline the order of business that will be undertaken today. First, I'll go through some procedural matters on voting and asking questions at the meeting. Following that, I'll say a few words about the past year for Mesoblast. Dr. Itescu will then provide an update on the operational and strategic developments of the business. Following his presentation, I will proceed with the more formal aspects of the meeting as outlined in the notice of meeting. Finally, I'll handover to Dr. Itescu to answer time permitting general shareholder questions following the completion of the formal business of the meeting. Let's move now to the voting and questions procedures. Voting on all resolutions today will be conducted by way of a poll. Shareholders will have the option of casting their vote before the meeting or appointing a proxy, attorney or corporate representative to do so on their behalf. If you haven't done so, you can vote at today's meeting online anytime during the meeting starting from now using the electronic voting card you should receive after clicking, get a voting card button. Voting will close shortly after the end of the meeting. We received some questions in the lead up to the AGM, which we will address when we go through the formal business of the meeting. Shareholders can submit written questions during the meeting by clicking on the ask a question button and then typing and submitting their questions. I encourage you to submit your questions as soon as possible, and we will address as many of these as we can during the course of today's meeting. If we receive multiple questions that are similar, we'll combine them into 1 or choose to answer the broadest question, which should cover the others. If you have difficulties using the platform, please check the online portal guide on Mesoblast website. Shareholders are able to ask questions by phone if they have a pre-registered and obtained their unique pin. Instructions on how to do so are displayed on the screen. To assure all shareholders have the opportunity to ask their questions, we request that you limit yourself to one question and then rejoin the queue if you have further questions. So at this point, I'd like to offer my Chairman's report. 2021 has been a roller coaster year for the world and a challenging year for both meaningful progress as well as some setbacks for Mesoblast. We have gone from the elation of seeing an FDA compiled panel of experts, vote in favor of our lead product, a potentially company-transforming partnership with global pharma and some very impressive clinical results to delays in our foundational submissions to the U.S. regulatory authority. But despite these challenges, our core therapies; remestemcel and rexlemestrocel, have continued to deliver results that demonstrate their lifesaving potential in addressing 4 complex medical disorders: graft versus host disease, acute respiratory distress syndrome, advanced heart failure and chronic lower back pain. Over the past 12 months, nothing has given me greater pride than seeing the progress of our remestemcel therapy in young children suffering from steroid-refractory acute graft versus host disease or commonly referred to as GVHD. This is surely one of the cruelest diseases, striking and often taking the lives of innocent young children who have already undergone the ordeal of a bone marrow transplant. Following a presentation of study results to the FDA's advisory panel last year and the panel then voting overwhelmingly in favor that the data supported the efficacy of our GVHD therapy, we were very disappointed that an approval did not materialize. However, we've regrouped and after addressing the outstanding items that the FDA requested, we are confident that our collegial collaboration could lead to a resubmission of our current biologic license application. The additional investments we've made with respect to remestemcel will also support commencement of a second Phase 3 trial for acute respiratory distress syndrome or ARDS, associated with COVID-19, a deadly combination of inflammatory reactions that has claimed so many lives during this pandemic. Promising results from our first ARDS trial, together with a recent constructive meeting with the FDA, paves the way for a highly anticipated follow-up study and a pathway to potential emergency use authorization for patients with the highest risk of mortality. Our second cell therapy, rexlemestrocel has also received a recent boost with its presentation at the American Heart Association's 2021 Scientific Sessions, where the latest results were outlined in a 5-year Phase 3 trial involving 565 patients, the largest ever trial of a cell therapy for heart disease. Mesoblast is excited by these results, which are due to be published by a major medical journal and will inform the progress of our other major submission before the FDA. As a Board, we're focused on our governance responsibilities as well as our need to improve diversity on the Board in order to benefit from a wider perspective that having a diverse membership brings. We are committed to enhancing gender diversity in particular as we bring on new directors. Our Board membership has transitioned in recent years as Mesoblast heads toward the potential approval of its first product with new appointments being Ms. Shawn Tomasello, Mr. Philip Facchina and myself. We've all brought diverse experiences to the Board, Shawn with more than 30 years commercial and transactional experience in the pharmaceutical and biotech industries; Philip, with more than 35 years of experience with corporate strategy, capital markets and business development; and then myself, with more than 4 decades of healthcare leadership experience as a payor and provider executive. In addition, I have served as Chairman of the Institute for Diversity for Healthcare Management and currently serve as an advisor to the National Association of Corporate Directors Center for Inclusive Governance. With the new appointments well settled into the Board, we are committed to a program of Board renewal with 2 of our long-standing Australian directors standing down in the next 6 to 12 months and a search having commenced for successor Australian directors. The next 12 months will be pivotal period in the evolution of our company, as a number of regulatory processes draw toward a close with the assiduous support of our clinical staff. I would like to take this opportunity to thank all of the remarkable researchers and healthcare professionals who made this possible as well as the diverse investment community who continue to show faith in our work. I would particularly like to thank our Chief Executive Officer, Dr. Silviu Itescu, our management team and our employees for their resilience, resourcefulness and incredible dedication over the past 12 months. This has been a tough and unprecedented period, particularly for the world's clinical community. But at Mesoblast, we continue to be awed by the deep commitment and compassion that our healthcare professionals and scientists have demonstrated throughout this pandemic. I'm proud to have seen these same qualities reflected across all levels of the team, as we continue to navigate the hurdles, bringing our lead therapies to the millions of people whose lives could be improved by them. I would like to now hand over to our Chief Executive, Dr. Silviu Itescu, who will elaborate on Mesoblast's corporate progress.

Thank you very much, Joe, and welcome to everybody on this call. Please go to Slide 12, please. We understand the mechanism of action of our platform technology. Our stromal cells have on their surface, a number of receptors that are able to be activated when the cells find themselves in the middle of inflammatory process, a severe cytokine storm. When they're activated through these receptors, they release a multitude of factors that are also well-defined that turn off multiple arms of the immune system. And that forms the basis of the target diseases that we go after. Next slide, please. This is a snapshot of our maturing pipeline. We have 2 product candidates, remestemcel and rexlemestrocel, and each has its own particular indications and strategic partners. Remestemcel is being developed for acute graft-versus-host disease in children and subsequently in adults as well as acute respiratory distress syndrome initially for COVID-19 and beyond that for other viral infections and other causes of severe inflammation alone. In addition, we're developing the product for refractory inflammatory bowel disease. Rexlemestrocel is being developed for localized delivery into the inflammatory heart in patients with advanced heart failure and in the inflammatory intervertebral disc for patients with chronic low back pain. To the right, you can see our various commercial partners who are either our partners globally for certain programs and indications or regionally for other developments in Europe, China and Japan. Next slide, please. The financial highlights that we presented most recently were identified on this Slide 14. We successfully entered into a refinancing and expansion of our senior debt facility with Oaktree Capital Management. The new USD 90 million 5-year secured facility has a 3-year interest-only period, after which time, 40% of the principal will amortize over 2 years, and a final payment will be due no later than November of 2026. Our cash on hand at the end of the last quarter was USD 116 million. And importantly, sales of TEMCELL, our mesenchymal stromal cell product that is being sold in Japan by a licensee, JCR, for the treatment of acute graft-versus-host disease, has demonstrated a steady growth trajectory after the plant capacity was expanded to meet continued and growing demand. Revenue from TEMCELL royalties increased by 10% from the prior year period overall to USD 7.2 million in the year ended June 30. And in the most recent quarter ended September 30, revenue from TEMCELL royalties were USD 2.4 million, an increase of 22% on the previous quarter and of 90% on the comparative quarter for last year. We are pleased by these numbers. In the most recent quarter, net operating cash usage was down USD 8.6 million from the comparative quarter to USD 19.6 million. Approximately 50% of the net operating cash usage was to support the regulatory pathway to approval, manufacturing scale-up and life cycle management of our lead product candidate remestemcel for the GVHD and COVID-19 indications. Now let's move on to the lead diseases for which remestemcel is being developed, acute graft versus host disease and then acute respiratory distress syndrome. If we could go to Slide #16, please. Acute graft versus host disease is a serious and fatal complication of an allogeneic bone marrow transplant. When an individual gets treated for cancer and is often cured for the underlying cancer, there is a bone marrow transplant that is provided to rebuild and replenish the bone marrow. During the conditioning regimen for this bone marrow transplant, tissue damage occurs, the bone marrow transplant then recognizes the recipient tissues as foreign. And the immune cells of the bone marrow from the donor attack the gut, the liver and other organs by releasing various cytokines, a so-called cytokine storm that is potentially fatal. Next slide, please. Children with steroid-refractory acute graft versus host disease are at particularly high-risk of treatment failure and death. More than 2,000 allogeneic bone marrow transplants occur annually in the U.S. alone in children. And despite adequate prophylaxis, more than 50% will develop acute graft versus host disease. Half of these will be refractory to steroids. And for these children, unfortunately, under the age of 12, there are no approved treatments. The disease affects frequently the gut and the liver. And when it affects these organs, mortality is as high as 90%. And this is after the fact that they've been adequately treated and cured of the underlying leukemia. Next slide, please. So we've presented data from 3 distinct studies that have demonstrated that remestemcel used in children with steroid-refractory acute graft versus host disease, results in significant clinical outcomes in terms of Day 28 response and Day 100 and Day 180 survival. As shown on this slide in yellow, across these 3 different studies, the Day 28 response was between 64% to 69%. In contrast, in control groups of children either within a placebo-controlled study or the overall Day 28 response is as low as 38% to 43%. In terms of survival, the 3 trials where remestemcel was used demonstrated, an overall survival through Day 100 of between [ 6 slide ] is a survival curve in a single center study of children with acute graft versus host disease and then refractory to steroids, 370 children. As you can see in red that at 6 months survival of these children, despite maximal alternative therapies. By 24 months, this force to a dismal 35%. And I demonstrate only 1 in 10 having a responder at Day 28 to various therapies. In contrast, those treated with remestemcel had a 67% responder outcome within 28 days, and this was significant. On the right-hand side, you see survival outcomes matched by high-risk MAP criteria. Again, as you can see, the children from the magic cohort, only 1 out of 10 was alive at 6 months compared with 7 out of 11 treated with remestemcel alive at 6 months, 64% versus 10%, P equals 0.01. So in particular, where remestemcel is making a real difference is in those children who are at highest risk of death where inflammation is greatest and where alternative therapies just do not work. We'll go to the next Slide 22. So where are we with respect to the regulatory and commercial pathway to approval for remestemcel in children with steroid-refractory GVHD. The data I've just shown you provide further support for the proposed anti-inflammatory mechanism of action of remestemcel and its immunomodulatory activity in patients with steroid-refractory acute GVHD, resulting in clearly improved survival outcomes. Mesoblast has an upcoming scheduled meeting with the FDA, the Office of Tissues and Advanced Therapies, OTAT, to address the appropriateness of our potency assays as they relate to remestemcel's proposed anti-inflammatory mechanism of action, including biomarkers and including survival outcomes. These discussions form part of the ongoing process that has been ongoing since our disappointing CRL last year to resolve the outstanding items with the goal of resubmission of the BLA and ultimately achieving approval of remestemcel in treatment of steroid-refractory GVHD in these very desperate children who need this therapy. Let's move on to the next slide. In the past 2 years, it has become evident that remestemcel has the ability to make a major impact in the dismal outcome of acute respiratory distress syndrome initially due to COVID-19, but likely due to other indications as well -- other causes as well. COVID-19 is a well-established respiratory virus with a high mortality due to severe inflammation of the lungs called ARDS. ARDS is caused by cytokine storm in the lungs in patients infected with this disease and is the primary cause of death. The extensive safety data of remestemcel and its understood anti-inflammatory effects and mode of action in GVHD makes a compelling rationale for evaluating remestemcel in COVID-19 ARDS. And moreover, the fact that following intravenous delivery, remestemcel homes selectively to the lungs, makes inflammatory lung disease an ideal target for this therapy. So let's have a look at where we are with respect to clinical outcomes and the pathway to potential EUA, emergency use authorization. I think what's also important is to understand on Slide 24, the evolving pandemic and what is now understood as to the relationship between the virus and the host immune response. As you can see in the bottom left figure, a normal immune response to COVID-19 requires having a healthy T cell arm that is able to handle the virus and eliminate it rapidly. Unfortunately, as people get older, the T cell arm of the immune response becomes defective, the virus is not cleared rapidly, in fact, viral load continues to increase, as seen on the slide to the right. And all the way to the right, what that results in is more severe disease, greater viral load, greater inflammation and ultimately higher mortality rates, the older the patient. Slide 25 summarizes the pathway we have taken to bring remestemcel into this disease opportunity. Initially, we evaluated under an emergency IND in ventilator-dependent patients at Mount Sinai Hospital, 11 patients, all of whom -- 10 of whom were under the age of 65 with moderate severe ARDS on ventilators. In these first 11 patients, we saw very striking results. 9, 82% successfully came off ventilators within a median of 10 days and were discharged. That experience informed how we move forward with our partners at the National Institutes of Health into a randomized controlled trial that was targeting up to 300 patients and ultimately enrolled 222 patients. The median age during this trial changed quite distinctly from initially 59 in the first half of the trial to 67, a decade older in the second half. And this is primarily because many experimental therapies were trialed and now proven to have failed, but offered to patients well before they were offered to enter into our study. So over time, the patient population turned out to be sicker, older and more end stage. We evaluated the results by age as was prespecified in the overall study. Next slide, please. And as I've highlighted, age was a primary risk factor for mortality in this study. And in the controls, as you can see in the prespecified cutoffs of less than or older than 65, there was a distinct difference in survival, such that the older patients had a 70% mortality, younger patients still had a 42% mortality. Now 42% death rate over a 2-month period is still a terrible outcome for young people who are being infected more and more frequently with this terrible disease. Next slide, please. The highlights of this study are on the very next slide, Slide 27. As you can see here, in the younger patients, we now make up about 2/3 of hospitalized and ICU-based patients and where the virus is infecting more and more frequently. In these patients, under the age of 65, we saw a 46% reduction in mortality through 60 days, where the control population had a 42% death rate and the treated patients with just 2 doses of our cells given 5 days apart, had a 26% overall mortality. And as you can see on the right-hand side, when we looked at the key secondary endpoint of overall improvement in respiratory function, we see that a significant increase was seen at every time point from Day 14, 21 and Day 30 in red in those patients who received remestemcel 2 doses compared to those who received placebo. And this indicates that these patients improved by at least one major category from severe to moderate from moderate to mild or no ARDS residual at all. And this is mirrored in addition by a variety of other key secondary endpoints. And now as we see additional biomarker data support and mechanism of action that explains why we see the survival benefit through at least 60 and 90 days. Next slide. Now the other key finding in this study was the synergy between ourselves and the only drug approved in patients on ventilators, which is dexamethasone. And what you see here amongst the dexamethasone treated patients, which, again, was a drug that was instituted midway through this overall trial. You can see that in blue on the left-hand side, dexamethasone treated control patients had a 48% overall survival compared to mortality, rather, compared to only a 14% mortality in red in those patients who received both dexamethasone and 2 doses of our cells. This is almost an 80% reduction in mortality, which is a very dramatic effect, and it's reflected on the right-hand side in the synergy in each of the key secondary endpoints, including overall improvement in respiratory function at every time point tested. And this is again seen and supported by various biomarker data. They continue to explain the mechanism of action and why the cells should be synergistic together with dexamethasone and other corticosteroids. We can go to the next slide, please. So what have we learned and what is the regulatory pathway to a potential emergency use authorization for remestemcel and COVID-19 ARDS? We met with the FDA in regard to potential EUA in the treatment of ventilator dependent patients with moderate to severe ARDS very recently. The FDA advised that on the basis of the data that we've demonstrated, if a second study confirmed the observation and was statistically positive, it could provide a data set to support an emergency use authorization. The FDA additionally indicated that potency assays need to be established in the great product commencement of this trial and that such potency assays that we're reviewing with the FDA for GVHD would likely be appropriate for COVID as with the entire CMC data set in the BLA for GVHD. In other words, they were able to reference the CMC, the manufacturing and the potency data that are being presented to the GVHD currently for COVID ARDS. We plan to move forward with an additional Phase 3 trial with the next step being to agree with the FDA on both the final protocol and the potency assay for the product. And this becomes an even more urgent next step, given the recent findings that we're all familiar with around the new variant of concern and its likelihood of more rapid spread globally. Now let's move on to some of the other indications for rexlemestrocel in particular, and the very exciting data that we've just heard presented at the American Heart Association. But first, on our back pain data. Rexlemestrocel is providing the potential for a new paradigm in the treatment of inflammatory low back pain due to degenerative disc disease, which continues to be a major unmet need and continues to be the #1 cause of prescription opioid usage across the U.S. and other western countries. The results that were presented earlier support the idea that this single injection into the inflammatory disc may give us durable and long-term reduction in pain in a way that is just not achievable with alternative therapies such as opioids. The study that has been presented, demonstrated significant pain reduction across all patients in the study, 391 at 12 and 24 months with no safety concerns. Moreover, similar results were shown in patients who are on opioids at baseline and those accounted for about 40% of patients. And through 24 months, what we saw in this group of patients was as much as 40% reduction in opioid usage. The conclusion is that rexlemestrocel may provide a safe, durable and potentially effective opioid-sparing therapy for patients with chronic inflammatory back pain due to this common disease. And the greatest benefits are seen when the cells are administered earlier in the disease process, which is a phenomenon that we're seeing across each of the indications before there is entrenched fibrosis and irreversible disease. We will update the market in due course as we get feedback from the FDA on the pathway for the next program. Now let's move on to heart failure. Chronic heart failure is a disease that remains the leading cause of death in the United States with an effect of more than 6.5 million patients in the U.S. alone and growing as the population is aging. Chronic heart failure is an inflammatory disease and has a high mortality, and at least 75% will die after initial hospitalization within the subsequent 5 years. This is a disease with a mortality rate that is as high as many cancers and heart failure. These drugs primarily target neurohormonal complications and volume difference. If we go to the next slide, Slide 34. This is a schematic of the complex mechanism of action of rexlemestrocel. But essentially, if you can focus on in the heart, the green is the inflammatory cell called the macrophage, which is activated, it secretes various inflammatory cytokines, including TNF, IL-1 and IL-6, and that causes progressive destruction of the heart muscle and high-risk for recurrent heart attacks and other vascular complications. When we put rexlemestrocel into the inflamed myocardium, it is able to be activated by these cytokines. And then as I've said earlier, releases anti-inflammatory factors that turn off the inflammatory immune cell. That, we believe, results in improvement in protection of the heart muscle against death, improvement in the vascular density in the myocardium and protection of a large vascular against occlusions like heart attacks. Next slide, please. So Slide 35 is a summary of what was presented a week ago at the American Heart Association Annual Meeting. Data from the randomized controlled Phase 3 trial in 565 patients with New York Heart Association Class II and Class III, low injection fraction patients were presented as a peer-reviewed late-breaking presentation. It was presented by the trial's co-principal investigator, Dr. Emerson Perin, who is the Medical Director of the Texas Heart Institute and Clinical Professor of Baylor College of Medicine. The newly presented data from this landmark study showed a significant relationship between the presence of systemic inflammation as quantified by biomarkers such as CRP and treatment benefit in high-risk patients on cardiovascular mortality, heart attacks and strokes. If we can go to Slide 36. The primary endpoint was not met, as we've mentioned earlier. And that's primarily because the primary endpoint already has demonstrated a reduction of symptomatic hospitalization due to volume-related [ overhead ] that is adequately treated by a variety of drugs that are out there today. And therefore, rexlemestrocel did not had benefit on top of the existing drugs on these symptomatic outcomes. Slide 37. However, this is where we see a divergence from existing therapies. On top of maximal standard of care, a single intervention with rexlemestrocel resulted in significant reduction over as long as 4 to 5 years of follow-up in all treated patients and in Class II and III patients separately on the recurrent on the incidence of nonfatal heart attacks or strokes. And these reductions were of the order of 65%, quite a large reduction in risk incidence of these severe outcomes. Please go to the next slide, please, Slide 38. We also see that in particular, the Class II patients who are early in this stage of progression and very significant reduction in cardiovascular death rate of the order of 57% on the left hand panel, and particular, of the order of 80% in the middle panel, when those Class II patients were selected on the basis of the presence of inflammation as measured by CRP. If we can go to the next slide, please, Slide 39. So this slide starts to look at the composite endpoint of what we call the 3-point major adverse cardiac event or MACE. This is an endpoint that the FDA has used multiple times to approve drugs in patients with high-risk of cardiovascular outcomes -- adverse outcomes, including in patients with diabetes and a number of the drugs that are now approved, both in diabetic patients and in heart failure patients have been approved on the basis of this exact endpoint. As you can see on the left-hand panel here, across all 537 treated patients, a single intervention of rexlemestrocel reduced the 3-point MACE significantly by 33% over a long period of follow-up. Most importantly, in the middle panel, you can see that when we select patients on the presence of the biomarkers, CRP is simple, well established, validated biomarker that physicians in their practice, in their offices, measure. You can see that this specific identifies the highest risk patients, and those patients are most likely to respond to a single intervention of rexlemestrocel. And here, we see an overall 45% reduction in the risk of the 3-point MACE over a 4 to 5 year follow-up period. But the separation occurs as early as year 1. This is the endpoint that we are most excited about that we will talk a lot more with the FDA as we continue our interactions. So the conclusions of this study are the transendocardial delivery, the next slide 40, of 150 million allogeneic MPCs was safe, did not elicit any clinically meaningful immune-related outcomes that were adverse. And over a mean follow-up period of 30 months, the longest such study of cell therapy in these patients with heart failure, chronic advanced heart failure, a single intervention with rexlemestrocel added on top of maximal approved standard of care, significantly reduced nonfatal heart attacks, nonfatal strokes across all Class II and III patients, cardiac death, particularly in Class II patients, and the composite of cardiac death or nonfatal MI or stroke across all patients, 537 treated patients, most evident though, was seen in those patients with evidence systemically of inflammation. I think on that note, I might stop, and I'll hand it back to our Chairman to conclude the more formal part of this AGM. Thank you.

[Audio Gap] on the significant progress of the business -- our business has made over this year and the exciting milestones coming up for this 2022 fiscal year. We're now going to move to the formal business of this meeting. I can confirm that notice of meeting was sent to all registered members. The company directors and the company's auditors in accordance with the company's constitution and the Corporations Act. In addition, the copy of the notice of meetings has been lodged with the Australian exchange. I will take the notice of meeting dated October 29, 2021, as being read. Mesoblast share registry provider, Link Market Services will conduct the voting by way of poll. And Mr. Jim Kompogiorgas of Link will act as returning Officer. I remind you that voting has opened and will close at the end of the meeting. Votes will be counted after the end of the meeting and results published on the Australian Exchange and Mesoblast's website. Before a vote is taken, I will inform the meeting of how many proxy votes have been received. As indicated in the notice of meeting, I will be voting all undirected proxies given to the chair of the meeting in favor of all resolutions considered at this meeting. I'll now move each of the resolution separately, and we will provide an opportunity for questions on each one. Shareholder questions on general business will be answered in the Q&A session immediately after the resolutions. The company's annual report includes the financial statements and Directors' declaration, the Director's report and the Auditor's report for the year ended June 30, 2021. The I will take these reports as read. While no resolution is required in relation to the financial statements and reports, shareholders, their corporate representatives, attorneys or their proxies are entitled today to ask questions of the directors or the auditor in relation to these reports. I ask that any questions concerning the remuneration report be raised at the next agenda item. Questions may also be asked of the auditor concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company and the independence of the auditor in carrying out the audit. I now invite shareholders to submit any questions on this item of business. I will pause to receive any questions. Niva, are there questions with regard to this item of business?

Joe, there's been no questions received on this item.

Thank you. Are there questions from telephone participants?

There are no questions on the phone lines.

Thank you. We will move to our next item of business. The Board submits its 2021 remuneration report to shareholders for your consideration and approval. The Corporation Act requires companies to put to shareholders a nonbinding vote to enable shareholders to voice their opinion on matters included. I will now pause to give shareholders the opportunity to submit any questions online. Niva, are there questions with regard to this item of business?

Joe, we've received one question on this item of business. The question is from Stewart Burn, representing the Australian Shareholders' Association. The question is, Chairman, with regards to the CEO's remuneration and specifically his LTI component, it does not appear to be any TSR hurdle in this component. Can the company please comment on how they perceive his remuneration is linked to shareholder returns?

Yes. Thank you for the question. I believe it's best answered by the Chair of our Nomination and Remuneration Committee, Mr. Dwyer. Donal, please respond.

Yes. Thanks, Mr. Chair. And also thanks Stewart from the Australian Association for the question. Look, we've had this conversation with Stewart and his colleagues on a number of occasions. And whilst we acknowledge that TSR is a hurdle that's routinely used within Australian companies in relation to vesting of -- vesting hurdles for options, we do not think it's appropriate for Mesoblast. And the reason is, first of all, we are very, very different to the other companies in the -- on the Australian stock Exchange. We are still in the process of developing to be a commercialized -- to commercialization. And because of that, we can have many cases of pretty high volatility in our share prices that really we don't think, therefore, using TSR is an appropriate hurdle. But we do believe is important is that the company identifies a set of meaningful milestones on its route to a significant event that will unlock shareholder value, be it either a product approval or a partnership with another organization. And we believe that the appropriate hurdles for the -- that we should trigger the vesting of any LTI instrument are such -- are the achievement of such milestones. And that's the approach that we as a company have been pursuing for several years. So we believe it's the appropriate one for us at this stage. So that concludes the question. Am I answered the question? Back to you, Mr. Chair.

Very good. Thank you for the response. Niva, I pause for a moment, ask if there are any other questions that have been communicated to you.

Joe, we've not received any other questions on this item.

Very good. Are there questions from the telephone participants?

There are no questions on the phone line.

Great. Thank you very much. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 2 as set out in the notice of meeting and put the resolution to a vote by poll. Will you please cast your vote. I will pause to allow you to cast your vote, and then we'll move on to the next resolution. Very good. We'll now move to a discussion of resolution 3, which involves the election of Mr. Philip Facchina as Director. He was appointed to the Board as a Director on March 29, 2021. He is eligible and wishes to offer himself for election by shareholders. The Board recommends that shareholders vote in favor of the election of Mr. Facchina. He did not participate in the Board resolution relating to his candidacy. I will now pause to give shareholders the opportunity to submit any questions online. Niva, are there any questions with regard to resolution #3?

Joe, no questions have been received on this item.

Thank you. Are there questions from telephone participants?

There are no questions on the phone line.

Again, thank you very much. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 3 as set out in the notice of meeting regarding the election of Mr. Facchina and put the resolution to a vote by poll. I will pause to allow you to cast your votes. We'll now move to discussion of resolution 4, which involves the reelection of each of Mr. Michael Spooner, myself, Mr. Joseph Swedish and Ms. Shawn Tomasello. The Board recommends that shareholders vote in favor of the reelection of each of these candidates. Each candidate has not participated in the Board resolution relating to their own candidacy. As set out in the notice of meeting, the directors remain committed to ensuring continued change in Board composition in line with good governance practices for director tenure and diversity. Accordingly, it is proposed that each of Mr. Michael Spooner, if reelected, and Mr. Donal O'Dwyer has long-standing Australian nonexecutive directors will retire from the Board over the coming 6 to 12 months. A search for appropriate Australian successors has commenced. I thank both Michael and Donal for their enormous contributions to Mesoblast over many years of service. I will now deal with each resolution separately. Resolution 4A deals with the reelection of Mr. Michael Spooner. Mr. Spooner will retire by rotation in accordance with the company's constitution. He is eligible and wishes to offer himself reelection. I will now pause to give shareholders the opportunity to submit any questions online. Niva, are there questions with regard to resolution 4A?

Joe, we have received a question on this resolution. The question is from Stewart Burn, representing the Australian Shareholders' Association. The question is, Chairman, Mr. Spooner has not -- has been on the Board for 17 years and is not considered by the ASA to be independent. Can you please advise why he seemed to be independent and why he should be reelected to the Board as an independent director?

Mr. Burn, thank you for the question. And let me respond by saying, as previously mentioned, we recognize Mr. Spooner's tenure on the Board, and he has agreed to step down in the next 6 to 12 months. Michael is a transitional or is in a transitional period, assisting the company to find an appropriate successor as Chair of the Audit and Risk Committee. The Board is grateful for his work on the Board, particularly with respect to leading the Audit and Risk committee. With respect to independence, the Board considered Michael's tenure and a number of other factors when assessing independence, as outlined in the ASX corporate governance principles and recommendations. The Board did assess that he has not formed associations with management or others that might compromise his ability to fulfill his role as an independent director. As Chair, I have seen Michael exercise independent judgment on matters raised by the Board. Again, thank you for the question, and I believe I've responded appropriately regarding the transition as well as his contributions to the Board. Niva, are there more questions that may have surfaced regarding online?

No, there are no more questions on this item.

Very good. Are there questions from telephone participants?

There are no questions on the phone line.

Thank you. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 4A as set out in the notice of meeting regarding the real exit of Mr. Spooner and put the resolution to a vote by poll. I will pause to allow you to cast your votes. As the next resolution pertains to my reelection as a Director, I will hand this meeting over to

[Audio Gap] Stewart for the question. And I can assure you that Mr. Swedish is the strong supporter of Mesoblast. And in fact, has requested to receive shares in lieu of cash payments for his services as a Director. Niva, are there any other questions with regard to this resolution.

No further questions have been received.

And are there any questions from telephone participants?

There are no questions on the phone lines.

Okay. Thank you. Look, prior to handing back to the Chair, I just wanted to note that Joe mentioned that this would be my last Annual General meeting participating as a Director of Mesoblast. And I just wanted to say to all of our shareholders, thank you for your continued support in our great company. And I also want you to know that it's been an absolute privilege to serve on your behalf. So with that, back to the Chair. Thank you.

I can state that proxy votes received for this resolution are displayed on the screen. So I will now propose resolution 4B as set out in the notice of meeting regarding the reelection and put the resolution to a vote by poll. I will pause to allow you to cast your votes. Very good. Thanks, Donal. And again, I appreciate your service to the Board. It's been remarkable for so many years. Thank you very much. Resolution 4C deals with the reelection of Ms. Shawn Tomasello. Ms. Tomasello will retire by rotation in accordance with the company's constitution. Ms. Tomasello is eligible and wishes to offer herself for reelection. I will now pause to give shareholders the opportunity to send any questions online. Niva, are there any questions with regard to resolution 4C?

Thanks, Joe. We have received a question from Stewart Burn representing the Australian Shareholders' Association. The question is, Chairman, Ms. Tomasello has no shareholding in the company, which shows a lack of faith in the future of MSP. Why should she be reelected to the Board of a company she does not seem to support financially?

Again, thank you for the question. Ms. Tomasello, I can underscore serving with her observing, is a very strong supporter of Mesoblast and has invested significant time and advising the management team repeatedly as the company gets closer to the potential launch of its first product. Ms. Tomasello has also requested to receive shares in lieu of cash payment for her services as a Director. Are there any questions from telephone participants?

There are no questions on the phone lines.

Proxy votes received for this resolution are displayed on the screen. I now propose resolution 4C as set out in the notice of meeting regarding the reelection of Ms. Tomasello and put the resolution to a vote by poll. I will pause to allow you to cast your votes. We now move to a discussion of resolution 5 concerning the proposed issue of options. Mr. Philip Facchina, relating to his recent appointment as a Non-Executive Director of Mesoblast. I will now pause to give shareholders the opportunity to submit any questions online. Niva, are there questions?

Thanks, Joe. We have received a question from Stewart Burn representing the Austrian Shareholders Association. The question is, Chairman, the issue of shares as part of sign on agreements is against ASA policy unless unavoidable. Can the Chairman, please advise why it was necessary to provide a sign on benefit to Mr. Facchina?

Yes. Thank you. Let me try to answer the question with respect to his appointment to the Board and the considerations that occurred in doing so. For clarity, we're proposing to issue options to him, not shares. Mesoblast is a biotechnology company, dual-listed with NASDAQ with multiple U.S. and other international directors. Given this, we need to ensure our remuneration framework is relevant to and competitive in multiple jurisdictions. In the U.S., it's expected that for directors to join a biotechnology company board that they be compensated through options rather than large salaries. We have chosen a middle path that meets the expectations of both U.S. and Australian directors. The options granted by Mesoblast to its nonexecutive directors, including the proposed options to Philip are issued without any performance or service conditions, so the Director's independence and impartiality is not compromised. Mesoblast has generally granted options to directors at the start of the tenure, which is the case this year with the proposed grant to Philip as an incoming Director. The Mesoblast Board does not intend to issue or de-issue of options to be an annual or regular event for the directors. I will now pause to give shareholders the opportunity to submit any questions telephonically. Are there questions from telephone participants?

There are no questions on the phone line.

Thank you. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 5 as set out in the notice of meeting regarding the issue of options to Mr. Facchina and put the resolution to a vote by poll. I will pause to allow you to cast your votes. We now move to a discussion of Resolution 6, concerning the proposed issuance of options to our Chief Executive Officer, Dr. Silviu Itescu, relating to his remuneration for the 2022 financial year. I invite shareholders to submit any questions on this resolution. Niva, are there questions with respect to resolution number 6?

Thanks, Joe. We have received a question from Stewart Burn representing the Australian Shareholders' Association. The question is, Chairman, the vesting conditions for the options for Dr. Itescu are very vague. Why should shareholders approve the vesting of these options, when the vesting conditions, especially for clinical KPIs have not been set?

I'd like to turn over the question to be answered by our Chairman of the Nomination and Remuneration Committee, Mr. O'Dwyer.

Thanks, Joe. And again, thanks, Stewart for the question and I -- my first answer is that we disagree totally that the milestones and conditions for vesting are vague, in fact, they're very, very specific. We have given an outline of the vesting conditions in the notice of meeting. And given that they're commercially sensitive in nature, we have only provided limited details, but more details will and have been provided in our remuneration report, following the achievement of the KPIs. So we tend for commercial reasons, not to get into too much detail at the beginning, but once the milestones have been achieved or not achieved, details are given. I should also add that, unlike many other companies that offer LTI instruments in Australia, our instruments are entirely auctioned. So that in itself is a hurdle, because unless the actual share price is higher than the issue price, then the auctions are of zero value to the recipient, and we believe that that in itself also aligns very much the recipient's incentives with the intent of our shareholders. So back to you, Mr. Chair.

Great. Thank you, Donal. I believe that's responsive to the question. Thank you for the depth. Niva, are there any other questions regarding resolution 6?

Thanks, Joe. We've not received any further questions on this resolution.

Thank you. Are there any questions from telephone participants?

There are no questions on the phone line.

Thank you very much. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 6 as set out in the notice of meeting, regarding the proposed issue of options to Dr. Itescu, and put the resolution to a vote by poll. I will pause to allow you to cast your vote. We next move to a discussion of Resolution 7, concerning the renewal of the proportional takeover approval provisions in the company's constitution. This is a special resolution and requires the approval of 75% of the votes cast by shareholders, proxies, attorneys or corporate representatives, present and eligible to vote at this meeting. I now invite shareholders to submit any questions on this special resolution. Niva, are there any questions with respect to resolution #7?

Thanks Joe. We have not received any questions on this resolution online.

Thank you. Are there any questions from telephone participants?

There are no questions on the for line.

Thank you. Proxy votes received for this special resolution are displayed on the screen. I now propose resolution #7 as set out in the notice of meeting regarding renewal of the proportional takeover approval provisions in the company's constitution and put the resolution to a vote by poll. I will pause to allow you to cast your vote. Finally, we move to a discussion of Resolution 8, the last item on the agenda, concerning the ratification of the issue of securities in our successful institutional placement earlier this year. I invite shareholders to submit any questions on this resolution. Niva, are there any questions with regards to resolution #8?

Thanks, Joe. We have not received any questions on this resolution online.

Very good. Are there any questions from telephone participants?

There are no questions on the phone line.

Thank you. Proxy votes received for this resolution are displayed on the screen. I now propose resolution 8 as set out in the notice of meeting, regarding the ratification of the issue of securities, and put the resolution to a vote by poll. I will pause to allow you to cast your vote. This brings us to the close of the formal business of the 2021 Annual General Meeting. In a moment, I will hand over to Silviu for any general questions on the company. Before I do so, I would like to remind you, that if you're intending to vote on the formal business of the meeting, you should finalize and submit your votes now. Voting will close shortly after the end of the Q&A session. As I mentioned earlier, the results of the voting at this Annual General meeting will be released to the exchange, once the votes have been counted. Thank you for all our shareholders for participating in Mesoblast's Annual General Meeting today. We appreciate your ongoing support and loyalty, and look forward to a rewarding year ahead. I will now hand over the meeting to Silviu for the Q&A session.

Thank you very much Joe. Niva, can I ask you to read out any questions that we have, that are business related, please?

Thanks, Silviu. We have received a question from Stewart Burn representing the Australian Shareholders' association. The question is, at the last 2 AGMS, you have given an assurance that retail shareholders will be treated equitably with institutional investors and capital raisings. This has not happened. Can you please state that all shareholders will be considered in future capital raisings, preferably using [ a partner ]?

We are deeply appreciative of the support from retail investors, and our intention always, and certainly in the future, will be to treat retail and institutional investors as equitably as possible. Unfortunately, sometimes that it's just not possible due to time constraints and the like. But we will nonetheless, entirely focus on treating both classes of investors in a similar way.

Silviu, we received another question from Stewart Burn representing the Australian Shareholders' Association. Question is, can you please advise why a decision was made to manufacture remestemcel in Singapore, prior to approval by the FDA. In retrospect, this appears to have been a poor decision. What are the plans for the current [ approval ] of remestemcel?

In order to receive FDA approval, product must be made in a GMP compliant facility to FDA specifications, and that's what we've been doing. The whole approach in order to have the FDA be in a position to inspect the manufacturing process and the facility, requires inventory to be built in a commercial facility, in an FDA compliant manner, that's what we've put in place. In addition, when we expect and anticipate approval of the first product, we have to have sufficient product available, so that it's available immediately to patients in need. That's both from a commercial perspective, from an ethical perspective and also from a regulatory perspective. So all of those are natural and normal deliverables that have been put in place, with the anticipation that we will have our first product approved from the FDA compliant facility in Singapore.

Thanks, Silviu. The next question is also from Stewart Burn representing the Australian Shareholders' Association. We've also received similar questions from a number of shareholders as well. The question is, can you please comment on developments with Novartis, and how this alignment will benefit shareholders in the long term?

So as a general statement, we continue to evolve our strategy based on our products and each of our product candidates have their own strategic initiative. So for example, graft-versus-host disease product is a relatively small commercial footprint that we intend to build out on our own, and focus on commercial delivery, and we can talk more about that a little bit later on. Other products have much larger requirements in terms of commercial footprints, and that includes the product for the ARDS indication as well as our cardiovascular indications. For those kind of products, we look to strategic partnerships. The Novartis partnership is one such partnership that encompasses well beyond clinical development, the focus on the commercial requirements for the large volume indications of inflammatory lung disease, both in the U.S. and outside of the U.S. and that we hope will bring a lot of value to Mesoblast in terms of the strategic alliance.

Thanks, Silviu. The next question follows on. There appears to have been ongoing delay in the Novartis closing, can you please explain this and when will the closing occur?

Well, as we have said repeatedly under the terms of the agreement, Novartis requires sufficient time to evaluate various components of the data that emanated from the 222 patient trial. That included clinical data, included biomarker data, manufacturing data, regulatory data. And those, as they come to hand, are being provided and they are being evaluated in a collegial manner between the parties. We hope that we'll be able to close that transaction relatively in short order and Novartis continues to evaluate the data in a fulsome way.

Thanks, Silviu. The next question is also from Stewart Burn, representing the Australian Shareholders' Association. The question is, Mesoblast continues to show mounting losses with this expected to continue into the future. This is obviously not a company suited to most retail shareholders, unless they are very risk adverse. Can you please advise why this company is listed on the ASX, and is not taken private?

I think that shareholders who invest in biotechnology companies, need to be well versed in both the risk, but also the reward of biotechnology companies that are developing and bringing products to market, with long patent coverage and potential for exclusive revenue streams. Nonetheless, biotechnology by its very essence, is a high-risk industry and I think those investors who are looking to invest in biotechnology companies, need to understand that there is technology risk, there's clinical risk, and there's regulatory risk. And that is part of the course, and I think Mesoblast has experienced those risks. We've outlined them very carefully. But at the same time, it's also evident that we are progressing substantially in a number of major areas, where we have a leadership position, where we have strong IP and where the technology is making major inroads, with outcomes that other therapies, including small molecules, including monoclonal antibodies, are just not able to make any difference. And so I think the public market is an appropriate place for biotechnology companies to be accessing capital for development. But I think it's equally as important for investors to understand, that there is inherent risk and going to these opportunities with their eyes wide open. Nonetheless, the rewards are tremendous for products that ultimately get commercialized.

Thanks, Silviu. The next question relates to our heart failure product. The question is, what are the plans and likely timing for a strategic partner in heart failure?

I think the recent presentation of the American Heart Association, makes clear that this -- these results stand-alone in terms of delivering outcomes that are just not achievable or have not certainly not been achieved by the very small molecule drugs that are out there today. The peer-reviewed presentation and [ Blake Baker ] presentation highlighted the unique deliverables in this study that Mesoblast achieved. We are in the middle of ongoing discussions with the FDA to get clarity on the pathway to potential approval in the high-risk patient populations using these endpoints and outcomes. And I think it is reasonable to anticipate that following clarity from the FDA, the discussions with potential strategic partners will continue in a way that positions the Mesoblast product in its best possible light and gives shareholders sufficient return to justify an appropriate strategic alliance.

Thanks, Silviu. Next question is, can you provide an update on the current trial of remestemcel in inflammatory bowel disease?

Yes. Thank you. I think this trial is an investigator-initiated program at the Cleveland Clinic, by a world-leading investigator in the space. We will be providing additional data in the upcoming quarter. But I think it's important that we work in sync with the investigator. There has been some delay in patient recruitment, of course, during the COVID pandemic, as a result of non-emergent indications and surgical use of facilities being withheld, subject to the ICU use for COVID ARDS patients. And I think that has delayed the study, but I think we're very excited to have the investigator put her results out publicly, and we expect that to happen in the coming quarter, as the investigator presents those data, we will, of course, make those results available to shareholders.

Thanks, Silviu. The next question is, when is the meeting with OTA regarding GVHD? And when can we expect to hear about the outcomes of the meeting?

The interactions with the FDA have been significant during the course of this year. We were very disappointed, of course, about a year ago, when despite the fact that the FDA's own advisory panel, the ODAC panel voted 9-1, almost unanimously that the product should be approved. Despite that, the FDA review team decided to give us a complete response, primarily requiring an additional clinical trial, but also asking for some clarification on potency assays. Subsequent to that, we have pursued a well-defined process with the FDA leadership, in terms of addressing primarily the clinical issues, and the current meeting that will be held very shortly with the FDA, will focus on our potency assay and its appropriateness with respect to explaining the mechanism of action and how it relates to the clinical outcomes that have been observed. So that will be happening very shortly, and we expect to be updating the market as soon as we have minutes from that meeting.

Thanks, Silviu. Next question is, does Mesoblast continue to supply Ryoncil for compassionate use by children suffering from AGVHD in the USA?

So we have online, our Chief Medical Officer, Dr. Fred Grossman. I would like to ask Dr. Grossman to talk to that specific issue. We have lots and lots of requests. So Fred, would you like to address that question, please?

Yes. Thank you, Silviu. Yes, indeed, we continue our compassionate use program. We provide stem cell patients with GVHD, children with GVHD that meet the same requirements as per our protocol. We certainly are getting requests all the time. And if they meet criteria, we do send cells and work very closely with the physicians who request cells.

I think it's fair to say, Fred, please chime in here. But I think it's fair to say that the unmet need continues to be very great. And unfortunately, there are only drugs available out there, including the most recently approved drug, that has excessive amount of toxicity in these unfortunate children, and we are getting many patients referred to us, who are refractory to all existing agents out there, remembering that there's nothing approved at all for children under 12, due to safety and efficacy concerns. Fred, would you add to that?

Yes. The requests certainly are coming in for that very reason. As Silviu mentioned, there are no approved treatments for those younger than 12 years of age. And certainly, treating physicians, academics, certainly know the data and the survival outcome from our pivotal trial. So we get very frequent requests. Also, even with existing agents, we see that, as mentioned, there's not only toxicity, but efficacy, especially in the more severe cases is not very high, and that leads to [Audio Gap]

Thanks, Silviu and Fred. The next question is, how secure is our ARDS related patent portfolio? There seems to be a number of others interested in this space from a cell perspective?

Thank you. We have granted patents in the U.S. and in Europe and in other jurisdictions, covering mesenchymal stem cells, mesenchymal stromal cells and the various markers, etcetera, for use in acute respiratory distress syndrome. So we believe we've got the leading intellectual property portfolio for mesenchymal lineage cells in the treatment of inflammatory lung diseases. And those are long-lasting and extensive and granted. We are proceeding with, as I've mentioned earlier, with moving towards a pivotal study, with the aim of receiving emergency use authorization in COVID ARDS, and then we will work towards broadening that in other indications, non-COVID related ARDS. So we believe we are the leaders in this space, both in terms of patient data, but as well as intellectual property, and we think that others will have to work around us or with us to access or have issues with our intellectual property.

Thanks, Silviu. The next question is beyond the expected feedback from FDA on chronic low back pain, what are the next steps in the program?

Clearly, having the FDA opine on the type of clinical study that needs to be put in place, is critical. Together, with a partner in Europe, we are expecting that the feedback from the agency will allow us to put in place a pivotal trial that is focused on both U.S. FDA approval as well as supporting E.U. approval. But until we get that feedback, we won't be able to make that clear. But we're very confident that we understand what the FDA needs, in terms of a pivotal trial design.

Thanks, Silviu. Next question is, is the proposed new COVID trial likely to again exclude nonmechanical events related to patients, given that biomarkers can now identify likelihood of progression to severe ARDS?

That's a very broad question, I think. I think the most important issue here is, where is the continued severe unmet need, and where have we demonstrated a survival benefit and how best to position a program for the most rapid confirmation, and the most rapid likelihood of EUA approval. The patients on ventilators continue to have the highest mortality, and that has not changed over the past 2 years. What has changed with the vaccines, of course, is that the proportion of patients who, on infection, end up hospitalized and then into the ICO and ventilators has dropped by maybe 75%. But 75% reduction remains -- continues, especially in the western world, with a very large patient population that continues to be in hospital and ultimately requiring ventilators. That's a population that continues to have the same level of high-risk for mortality, since the only approved drug in ventilator patients is dexamethasone. And so, we think we understand what the FDA requires in terms of an endpoint. It would have to be a trial that mimics, reproduces or confirms the data that was generated in the last study, in patients who were relatively younger under the age of 65, with an endpoint of mortality benefit through 60 days. Whether the cells then also provide a potential benefit in patients who are hospitalized, but are not yet on a ventilator, is a study that we would continue to consider and evaluate, together with our potential strategic partner. It's whether we can prevent progression from pneumonia to requiring ventilation in ARDS, is something that we would be very interested in and potentially an area that would require an even lower dose of ourselves, than we're currently anticipating for ventilated patients. And that will be the basis of further evaluation, as we move forward.

Thanks, Silviu. The next question is many of our trials thus far seem based on a single dose. Would you consider additional trials with multiple dosing in the future? For example, in ARDS and the heart space?

Well, I think the results in the ARDS study demonstrate the 2 doses within 5 days, has given us a substantial reduction in mortality in patients who are appropriately targeted with a degree of inflammation that was associated with a younger age group. I think we're understanding now, that inflammation is key to both outcomes and response. As was seen most recently in the Heart Rate trial with levels of CRP. And so, defining the biomarker levels of a particular patient and considering how best to adjust dosage in different age groups, is something that we'll focus on in the future. I think that patients who are beyond the age of 65 with COVID, have a very high level of inflammation, and that's where potentially higher dosing may be required. But that will be the basis of additional Phase II exploratory studies. We think that we've identified the appropriate dose for younger patients with COVID related ARDS. With respect to heart failure, I think it's quite evident that, with the outcomes that we've established 3-point MACE, a cardiovascular death, heart attacks or stroke, a single intervention with 150 million cells has made a substantial reduction, a 65% reduction in those outcomes is unheard of, with other therapies. In fact, other therapies that have been approved in high-risk patients for a reduction of the same 3-point MACE endpoint, give outcomes of the order of around less than 10%. So if we can reproduce those data with a single intervention, I think that we would be a standout product. So I don't see any reason for any further additional doses in that particular disease. It depends on the degree of inflammation that one is targeting, and I think part of our Phase II and Phase III strategic application is to identify appropriate dosage. Dr. Grossman, would you like to add to those statements?

I think very clearly, across all of our programs, given the data and analysis that we've completed, we've essentially defined the appropriate population and the best dose, particularly in those that are more likely to respond. So whether it's chronical back pain, heart failure or COVID ARDS, we clearly define the population that responds most to the current doses that we're using and we're moving forward in all of those programs. And as you know, are in discussions with the FDA. Regarding the populations that didn't have the same response, as Silviu mentioned, those over 65, we clearly believe that this is a dosing issue, and will be studying a different higher dose in that population. We are now working with, really the world's experts, to put together our ongoing protocols moving forward, and we'll be able to report to you soon, what those are and when they will start.

Thank you, Silviu and Fred. The last online question we've received is, where does MPC 300 IV, diabetes and RA sit in the great scheme of things? Is the company still interested in these spaces going forward?

Thank you for that question. I think what that begins to address is, is really the pipeline development, strategic pipeline development. I think we are, in some ways, very fortunate that each of the areas that we're focused on in the past few years and most importantly, the results that we've collected in the last 12 months, have identified, as Fred just said, the appropriate target populations, the appropriate dosage, the appropriate indications. We are now in a position where we will, as a management team and Board, sit down over the next couple of months and do a strategic evaluation of our portfolio from top to bottom to identify the greatest likelihood of success, the shortest time to commercialization on a product-by-product basis. And we have to make rational decisions. We do not have unlimited resources. We have very focused resources, and we will put those resources behind those indications first, that get us to market and bring revenue to the company, as we should be doing. It's clear that other indications in Phase II, for example, have great potential, and they will form part of the overall strategic portfolio evaluation and recommendations, and I think that's exactly what shareholders would expect us to do, as a maturing company that moves from the development stage to commercialization.

Thanks, Silviu. There are no more online questions. Are there any telephone questions?

There are no questions on the for line.

So if there are no further questions, I'd like to hand over to our Chairman, Joe Swedish, would you like to make some concluding statements, please Joe? Thank you.

Yes. I would like to just offer one reflective moment. Earlier, Donal O'Dwyer was very thoughtful in commenting on his service to the Board. And Michael Spooner, obviously did not have a chance to weigh in, I'm sure he would echo the very same sentiment, and I just want to take a moment to acknowledge not only Mr. O'Dwyer's service to the Board, but also Mr. Spooner, both have been remarkably gifted board members who increase the value for our shareholders as well as serving a fiduciary role, regarding protecting the assets of the company and continue to grow the company on a very strong trajectory, given the R&D commitments and efforts that have been [ applied ] for many years. I thank for their service over many years, as they depart over the coming 12 months and wish them well, but again, they will be missed and especially the talent that they've contributed to the committees that they have served. With that said, I'm ready to close the meeting. Thank you very much for all in attendance, and I hereby declare the meeting adjourned.